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Government Needs To Do More Than Point Fingers On Food Prices

“The Government needs to admit that it’s policies are the cause of rapid rises in food prices that are making life so difficult for many New Zealanders, or their changes to the grocery sector will be pointless,” says ACT’s Associate Finance spokesperson Damien Smith.

“The passing of the Commerce (Grocery Sector Covenants) Amendment Bill tonight may indeed prevent supermarkets from using covenants in an anti-competitive way. However, anyone thinking it tackles the broader issues that have driven the price of food up by 6.8 per cent in a year are sadly mistaken.

“Domestic inflation is the real villain in the rising price of food, and that is no one’s fault but the Government’s. Inflation is too much money chasing after too few goods, and this Government has borrowed, printed and spent too much money.

“Minister David Clark has repeatedly worked himself into a lather trying to put all the blame at the feet of the supermarkets, but until he starts looking in the mirror and sorts out his Government’s actions then New Zealanders will see no difference in their prices at the checkout.

“The Commerce Commission’s report on the sector found that excess profits were at most $86 per New Zealander, yet between March 2021 to March 2022 alone, prices have increased by $282 per person.

“The Government needs to admit the sector is overregulated and this is strangling competition. It’s too hard to build, too hard to invest, too hard to do business in New Zealand.

“If we want a bustling, competitive supermarket industry, we need to attract big players by showing them an industry they want to invest in. Instead they’ll look at Australia which attracts 80 per cent more foreign investment per capita.

“Red tape is also pushing up costs at the farm gate. According to Beef + Lamb New Zealand, on-farm price inflation from March 2021 to March 2022 was more than 10 per cent. This is exacerbated by excessive restrictions like national winter grazing rules that ignore regional differences.

“ACT would address these problems instead of just performatively grizzling at supermarkets. We would:

  • Repeal and replace the Resource Management Act to make it easier to build new supermarkets
  • Repeal stifling new regulations on farmers pumping up the prices at the farm gate
  • Exempt OECD members from the Overseas Investment Act, allowing foreign supermarket chains to invest in New Zealand with certainty.

“If we want more competition, it must be possible for investment to come into the country, sites to be developed for property, skilled people to come through the border, and new employers to employ people without endless bureaucracy, not to mention the onset of ‘fair pay’ agreements which will make competition even harder with all workers in a sector on the same contract nationwide.”

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